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Reaching for Silicon Valley

Joy Laskar at his California home.Credit
Peter DaSilva for The New York Times

Joy Laskar was not what you’d typically think of as a threat to public safety.

At the Georgia Institute of Technology in Atlanta, where he was a professor of electrical engineering, Dr. Laskar did research on chip design. He mentored dozens of Ph.D. students and, over the years, started and sold a number of tech companies. The last one, called Sayana, created a promising wireless chip and was being courted by the likes of Samsung and Qualcomm.

But on May 17, 2010, agents from the Georgia Bureau of Investigation, wearing bulletproof vests, raided his university offices. A parallel scene played out at Dr. Laskar’s home, where his wife, Devi Laskar, found armed agents in her driveway. While agents went through the house and confiscated files and computer equipment, she went to a coffee shop to call a lawyer.

“What were they looking for?” Dr. Laskar said in disbelief, recounting the event recently. “Cash under the bed? Chips in the ceiling?”

The day of the raid, there was to be an auction for Sayana. It never happened. Instead, Dr. Laskar was suspended without pay from his tenured position. He was later arrested on state racketeering charges and eventually fired by Georgia Tech, accused of misusing university resources.

In one day, his life was upended. But why it was upended — and why university officials and authorities in Georgia acted so aggressively — is still leaving people in high-tech circles scratching their heads.

It has been three years since Dr. Laskar, now 50, was arrested, and he has not been indicted. The statute of limitations in a case such as his is four to five years, said Lauren Kane, a spokeswoman for the Georgia attorney general. She said that there was a continuing criminal investigation, but declined to comment further.

For Georgia Tech, the story of Dr. Laskar appears to be a clear-cut case of a professor who broke its rules and had to go.

Matthew G. Nagel, a university spokesman, declined to provide an interview with an administration official to discuss Dr. Laskar because of continuing legal matters. He said Georgia Tech takes its responsibility for proper use of public funds seriously and responded appropriately.

“We can clarify that violations of this nature are not common and would typically result in dismissal,” he said.

Dr. Laskar, for his part, denies that he did anything wrong. But he struggles to come up with a good explanation for why the university got rid of him. It could be that he stepped on too many toes as he became more successful, he said, or perhaps the university, bruised by an earlier financial scandal, came down hard for fear of another one.

Or did he truly mess up?

Dr. Laskar’s downfall, little known outside Georgia Tech and the clubby world of chip design, is an extreme illustration of the misunderstandings — and legal risks — that academics-turned-entrepreneurs have to navigate as they try to turn classroom concepts into successful companies.

Photo

In September 2010, Dr. Laskar, then a Georgia Tech professor, was arrested on racketeering charges.Credit
Alan Hand/WSB-TV

On one side are universities that want to make money from faculty research. On the other are commercial interests that don’t always play by the academic rules. In the middle are people like Dr. Laskar, an ambitious man with one eye on Silicon Valley and the other on his academic work in Atlanta.

For professors who juggle academic and entrepreneurial responsibilities, conflicts of interest are an occupational hazard. They can be accused of providing academic favors for students who agree to work for start-ups for little pay. And they run the risk that research grants intended for a university look as though they were used, directly or indirectly, to benefit the professor’s commercial interests.

“This is very delicate stuff,” said Oren Etzioni, until recently a computer science professor at the University of Washington, who founded several Internet start-ups while he was there.

Universities have faculty codes of conduct that provide general guidelines in these situations. Georgia Tech, for example, doesn’t want faculty members to spend more than 20 percent of their time on start-ups or other forms of consulting. Policy violations are usually handled through disciplinary actions, but outright dismissals are rare, professors at several research universities said. Unless a professor is clearly abusing his academic position for personal gain, schools with strong track records of commercial success have a liberal attitude toward their academic entrepreneurs.

That’s why the actions against Dr. Laskar have puzzled people in his field.

“He was known as this guy who had the most Silicon Valley spirit,” said Thomas H. Lee, a professor of electrical engineering at Stanford who has been involved in several start-ups while there. “That’s sort of what Georgia Tech hired him for. He was bringing this quasi-Wild West way of doing things.”

Be Like Stanford

At Stanford, in the heart of Silicon Valley, academic research with an eye toward private industry — that “quasi-Wild West way” — is a way of life.

No other university has been associated with so many big tech giants created by former students and faculty members— companies including Google, Cisco Systems, Sun Microsystems and Hewlett-Packard. A study conducted last year by two Stanford professors estimated that nearly 40,000 active companies generating annual revenue of $2.7 trillion can trace their roots in some way to Stanford.

The university’s affiliation with so many of these spin-outs, as they are known, is lucrative as well as legendary. Stanford has earned about $337 million just from licensing to Google its search algorithm, which was developed while the company’s co-founders were in graduate school.

One of Stanford’s closest rivals in creating spin-outs has been the Massachusetts Institute of Technology, which played a role in the creation of Akamai, iRobot and the E Ink Corporation. Many other schools with respected computer engineering programs, including Cornell and the University of Washington, are all doing more to copy Stanford’s success in commercializing technologies, which can benefit the schools through patent licensing fees, alumni donations and the cachet that attracts future generations of students.

“Every reasonable university in the world now wants to do the same thing,” said Mike Farmwald, a serial entrepreneur in Silicon Valley who was a co-founder of one of his companies, Rambus, with a Stanford professor.

Founded in 1885 as a trade school to strengthen the industrial underpinnings of the South, Georgia Tech was eager to replicate Stanford-like corporate success, current and former professors said.

The Klaus Advanced Computing Building, a gleaming glass and brick structure that opened at Georgia Tech in 2006, is a symbol of one of Atlanta’s biggest technology hits. It is named for a Georgia Tech alumnus and donor, Christopher W. Klaus, founder of Internet Security Systems, which IBM bought for $1.3 billion in 2006.

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A chip made by Centric Technologies, which bought the assets of Dr. Laskar’s company Sayana and has sued a branch of Georgia Tech.Credit
Centric Technologies

One problem for Georgia Tech is a brain drain to other regions with more abundant opportunities. In a March 2009 email presenting a vision for a “Silicon South” in Georgia, Paul Freet, an official with a start-up incubator at Georgia Tech, wrote that of 90 people who received Ph.D.s from its college of electrical and computer engineering in the 2007-8 school year, only 16 were still in Georgia at that time.

A criticism of universities is that they let their research idle in labs. To counter that, Georgia Tech in 2003 formed a chip design center, the Georgia Electronic Design Center, with a mission of translating research into economic impact in the state. Dr. Laskar was its founding director. Because public institutions like Georgia Tech are funded by taxpayers, they often face more pressure than private schools to show they are producing financial benefits.

The nerve center of the university’s commercialization efforts is Technology Square, a cluster of office buildings, conference centers and retail stores on the east side of campus, in a once-derelict stretch of the Midtown area of the city.

It was here that Dr. Laskar’s career imploded.

“At Stanford, it would be hard for me to imagine mounting that kind of response unless they had seen stacks of gold bullion in his office with Pablo Escobar’s number written on scraps of paper,” Dr. Lee said, referring to the Colombian drug lord.

A Standout and an Irritant

Dr. Laskar was exceptional at Georgia Tech. He would probably be the first to tell you that.

During his 15 years at the university, Dr. Laskar developed a reputation as a hard-working, respected academic in the arcane field of low-cost, low-power communications chips, placing his work at the silicon heart of modern mobile devices. By all the usual academic measures, he was a standout, advising more than 50 Ph.D. candidates during his time at Georgia Tech and having 50 patents awarded or pending.

“He’s top-notch,” said Dwight C. Streit, a professor of electrical engineering at the University of California, Los Angeles, who has known Dr. Laskar since he was a graduate student. “He’s done all sorts of spectacular work.”

As Dr. Laskar’s career took off, the university and the state of Georgia were increasing efforts to encourage high-tech development in Atlanta. The area had produced a few technology successes, but nothing of the magnitude of Silicon Valley’s biggest hits or as well known as two of the city’s corporate giants, Coca-Cola and Home Depot. Dr. Laskar got grants and research contracts from companies and government agencies that finance much academic research, flying 250,000 miles a year, he said. His rainmaking raised over $70 million for Georgia Tech from Microsoft, the National Science Foundation, Texas Instruments and others, according to a lawsuit he filed against university officials.

His biggest catch was Samsung, the South Korean electronics colossus, which stationed about 30 of its own engineers in a lab at the chip center, cheek by jowl with Georgia Tech researchers.

Students and faculty members began forming start-ups, some of which attracted funding from Silicon Valley investors. Dr. Laskar was among them. Two chip start-ups of which he was a co-founder, RF Solutions and Quellan, were sold for a combined total of about $40 million, he said.

Sayana was Dr. Laskar’s fourth start-up, formed in 2006 to develop a chip capable of transferring movies, music and other data at high speeds to mobile devices over short physical distances.

Sayana’s work was based on chip research that Dr. Laskar had done during his day job as an academic at Georgia Tech. Sayana paid the university more than $1 million in licensing fees for the rights to use that intellectual property, Dr. Laskar said. The company was staffed by a handful of Dr. Laskar’s former graduate students from Georgia Tech, and they worked out of an office at the chip design center.

With Sayana, Dr. Laskar said he didn’t take the informal path that faculty start-ups at Georgia Tech are encouraged to follow. While he accepted money from a start-up incubator financed by Georgia Tech, he declined later rounds of funding because it would have involved giving up equity in Sayana, allowing the university to install board members and professional managers of their choosing. “I’m sure that torqued people,” Dr. Laskar said.

(Another part of Georgia Tech ended up with a 10 percent stake in Sayana through an intellectual property licensing deal.)

He preferred instead to work with investors with Silicon Valley connections and ultimately decided to sell his start-up. To handle the deal, he hired a firm in Northern California, Pagemill Partners, rather than Atlanta-area investment bankers.

Dr. Laskar is known for his affability, but he is also prone to occasional expressions of immodesty.

“I was on the express lane, and everybody was stuck in traffic,” he said in an interview, describing his career arc at Georgia Tech.

The Police Raids

Sitting on a bench in Technology Square, Chris Evans, once the director of operations at the Georgia Electronic Design Center, recalled how on May 17, 2010, agents with the Georgia Bureau of Investigation showed up and demanded to search the premises. They swept through the lab with guns drawn, clearing each room before collecting computers and other evidence, he said. (The G.B.I. disputes that guns were drawn during the raid.)

When the raids happened, Dr. Laskar was at a meeting with university administrators. They presented him with a letter from George P. Peterson, the Georgia Tech president, informing him that an internal audit into cost overruns at the chip design center uncovered “substantial evidence of malfeasance on your part.”

Georgia Tech suspended him from his $208,000-a-year job without pay, along with several other staff members at the center. The university accused Mr. Evans of processing financial contributions improperly and falsifying records, which he denied doing. He was eventually dismissed. Mr. Evans was also arrested on related criminal charges, which were later dropped. He said he could not find work because of the publicity and has worked as an $11-an-hour day laborer, helping renovate a store.

The G.B.I. appeared to be conducting the raid at the prompting of Georgia Tech, according to an affidavit by the bureau in support of the warrants used in the raids that day.

For nearly six months, Dr. Laskar says, he was unable to get details about what Georgia Tech thought he did wrong. When he learned that September that he would be facing criminal charges, Dr. Laskar walked into a police station in Atlanta. He was released after posting a bond.

Eventually, he learned that the university had a number of complaints. For one, the administration contended that he misled Georgia Tech about the extent of his involvement in Sayana, describing himself as an adviser to the company on faculty conflict-of-interest forms in some years, and a founder in others.

Dr. Laskar said that was because of sloppiness, not deceit. His connection to Sayana was not a secret in any case. Senior Georgia Tech administrators testified in a university hearing, held to determine if he should be dismissed, that they knew about his involvement with Sayana, according to a report from the hearing, which was presided over by a faculty committee.

The university also contended that Sayana employees used university lab space, equipment and other resources without authorization. Dr. Laskar and the university disagreed over whether his start-up had that authorization.

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Stephen Fleming, a vice president at the university, says Atlanta compares favorably with Silicon Valley as a tech center. “This is where you do start-ups for grown-ups,” he said.Credit
Rob Felt/Georgia Institute of Technology

Most serious were accusations of misuse of funds. Initially, Georgia Tech auditors accused Dr. Laskar of stealing as much as $1.5 million to benefit Sayana. In the end, the faculty committee determined that Georgia Tech had paid for $50,000 worth of chips in 2007 that were sent to a Korean chip research institute to satisfy a contractual obligation that Sayana had with it.

Dr. Laskar argues that any chips paid for by Georgia Tech and sent to the Korean institute originally served academic purposes. He added that the Koreans did not keep the chips, returning them to Georgia Tech after its engineers verified that they worked. Dr. Laskar said that this was a common practice with other companies at the chip design center and that Sayana had the rights to do it because of its licensing deal with Georgia Tech.

The accusations followed an episode at Georgia Tech two years earlier. The university had been caught up in a scandal that received wide publicity in Georgia, in which employees were charged with making personal purchases on Georgia Tech credit cards, known as procurement cards.

After Dr. Laskar’s hearing, the faculty committee sent a final report on May 7, 2011, to Dr. Peterson, Georgia Tech’s president, saying that Dr. Laskar should go. “These violations are sufficiently egregious to warrant dismissal,” the report said. While the climate in the Georgia Electronic Design Center “may have encouraged some of these violations,” it said, “Professor Laskar’s leadership position in the G.E.D.C. gave him a particular responsibility to set an example and to insure that such violations did not occur.”

After reviewing the university’s accusations against Dr. Laskar, Mr. Farmwald, the Rambus co-founder, who knows Dr. Laskar, said it appeared that Dr. Laskar “pushed the edges” of what seemed ethical in some cases. Mr. Farmwald said he was surprised, though, that the school did not handle the situation with a discussion about its policies.

“Clearly, someone at G.T. was pretty unhappy with Joy and wanted to make an example out of him,” Mr. Farmwald said. “Some of the charges seem pretty stretched.”

One current faculty member at Georgia Tech, who declined to be named for fear of getting on the bad side of the administration, said Dr. Laskar’s firing and arrest had had a “horribly chilling effect” on faculty start-ups there. But Stephen R. Fleming, a university vice president who oversees efforts to promote start-ups and other commercial uses of its innovations, denied that this was the case. The number of faculty start-ups created at the university has, with one exception, been nine or 10 a year since 2005, according to Georgia Tech. In 2010, when Dr. Laskar was suspended from Georgia Tech, there were 12, though Mr. Fleming said it was largely an accident that a few more start-ups began that year.

“We haven’t seen a drop-off for any reason,” Mr. Fleming said.

This summer, a Georgia Tech start-up incubator housed in a high-rise office building was packed with early-stage companies beavering away on their products. Mr. Fleming was eager to show the entrepreneurial spirit in Atlanta, comparing it favorably to Silicon Valley.

He hands out buttons to visitors with a red slash through the word “Valley” to underscore the point, and bristles at the notion that all the tech action is in Northern California. Atlanta’s lower cost of living gives it an edge, he says, especially among older entrepreneurs. “This is where you do start-ups for grown-ups,” he said.

Dr. Laskar is now fighting his old employer in court. He filed a civil suit against the board of regents of the University System of Georgia and Georgia Tech’s president, Dr. Peterson, seeking damages for what Dr. Laskar says was violation of his rights when it fired him. The defendants have asked a judge to dismiss the suit. In 2011, the board of regents settled an earlier suit by Dr. Laskar, in which he accused Georgia Tech of violating its own policies by suspending him without pay. The board agreed to pay him $258,000 in back salary, benefits and lawyer fees.

He sold the assets of Sayana to a new company, Centric Technologies, which is now suing the Georgia Tech Research Corporation, an organization that handles licensing of university research, for $30 million to $40 million in damages. Centric accuses the organization of holding back its chip prototypes, preventing it from moving forward with its business. Dr. Laskar owns part of Centric, as does Georgia Tech. The Georgia Tech Research Corporation has denied Centric’s contentions.

Dr. Laskar said he had been unable to find a full-time position in academia since his Georgia Tech dismissal. He moved his family to Silicon Valley and now works for an investment and advisory firm there. He longs to go back to a university.

“What I am is a teacher,” he said, “and inventor.”

A version of this article appears in print on November 17, 2013, on page BU1 of the New York edition with the headline: Reaching for Silicon Valley. Order Reprints|Today's Paper|Subscribe